By Daniel Ladue • Photos by Jessica McCafferty
Tucked away on a side street in the neighborhood behind the Middle School in Plattsburgh is Plattco Corporation. While the neighborhood is quiet and seldom seen by many local residents, the business, originally known as the Plattsburgh Foundry and Machine Company, has been there since 1897. (For an excellent history of the foundry, refer to Strictly Business, February 2023. https://www.strictlybusinessny.com/post/it-s-who-we-are
In 2000 the company filed for bankruptcy. Two years later it was restructured and employees took ownership of it. Since then, Plattco has not only survived, but thrived.
Bankruptcy has a way of upending the lives of employees, releasing them and leaving them to find future employment. And yet, another option exists. Instead of terminating the business facing bankruptcy, employees can take full ownership of it.
Michele Derrigo-Barnes, CEO and current president of Plattco, explained that management at that time chose a “home grown” approach to the restructuring which modeled that of an Employee Stock Ownership Plan (ESOP) where employees and creditors take control of the company’s stocks.
Plattco’s financial restructuring works as a trust fund. Employees generally do not have control or access to their shares until they reach retirement age, or when their shares are fully vested.
When employees became the new owners of Plattco, there was a great sense of motivation for the business to do well. Workers were invested in it and were able to vote on significant strategic decisions. No one person had a majority of shares or control over the organization.
The Rebound
When Plattco filed for bankruptcy, there was no money to pay creditors and so the company offered stocks in exchange. At the time, they were valuated at 1/10 of a penny. Depending on one’s position in the corporation, most employees and creditors were given between 15,000-20,000 stock shares. Today, each stock is worth $4.60. Those who had 15,000 shares to begin with, now have $69,000 in their portfolio—a very good return on an initial investment of $15.
In 2002, there was no period of investiture. Today there is. New workers are given between 4,250-5,250 stock shares as an incentive to stay with the company. After a year, those employees are given a promissory note for a set number of A certificates and a set number of B certificates. They must then wait for six more years to be fully vested. It is only then that they can leave and cash in their stock, hopefully at a valuation rate higher than when the notes were given.
Turnover is low and most new jobs at Plattco are filled through word of mouth. A machinist may recommend a friend when a position opens up. Because the employee “owns” the business, he’s not likely to put his name on the line for the new kid on the block unless he believes he will be an asset to the company.
Plattco Corporation has two distinctly different employee tiers. Fully unionized under the Teamsters’ Union are those who work in the Foundry, Machine Shop, Product Flow, Field Service and Maintenance. At the management level, the engineers who design the double flap airlock valves and slide-gates, are not unionized. Both sides of the company, however, fall under the more-than-generous, Teamsters-generated, health package which includes 100 percent medical, dental and vision coverage as well a $7,000 stipend to be used for anything the health policy doesn’t cover. To add icing on the corporate cake, that money can accumulate and be added to the final retirement package.
Plattco also offers its employees a 401k with three percent given by the company each pay period. Its unionized foundry workers work ten hours a day, four days a week. If they want to work overtime, they can fill in on Fridays. This four-day work week gives employees a three-day weekend and reduces transportation by 20 percent – something that is good for the environment and for the pocketbook.
It’s no wonder people don’t leave Plattco. In many ways it is reminiscent of Maoist China’s “iron-rice bowl” that promised workers protection from cradle to grave. A young person right out of high school can be hired as a cleaner and work his way up to Master Foundry Worker. An apprentice model exists that allows a new employee to train under a master machinist. All workers are encouraged to climb the corporate ladder. When foundry worker A, who is currently earning a very competitive salary, is ready to move into a foundry worker B position, he must pass a test to prove his ability. At Plattco, there is room for the motivated employee to grow within the company.
At this time, there is a managing board of five people, including three employees and one creditor. The board determines the next CEO and also oversees stock valuation, but does not hire, fire or govern salaries. The management team hires, fires, determines the next CEO, governs salaries, and oversees stock valuation.
Win-Win
Almost everything at Plattco falls under the category of “win-win.” Employees are happy, are proud of the wonderful relationship they have with the board and can help generate changes that are good for everyone. The better the company is, the better it is for those working there. They want to do a better job because that makes “their” company better.
Derrigo-Barnes explained, “If someone has a doctor’s appointment or slips out to attend a child’s baseball game, s/he’s not penalized or forced to take a personal day. When workers make decisions for their colleagues, it is always going to be in the employee’s best interest.”
Plattco has accomplished a great deal in the past 20+ years. The company paid off its debts, survived and is now flourishing. “People take a lot of pride working here. We’re in a great place. The firm is stable, has become more efficient and we are doing more with less. Last year, 2023, was our most successful year ever,” Derrigo-Barnes offered.
Plattco has every reason to be proud of the work it has done and for its resounding success in restructuring itself. Let’s hope for another 127 years of success.
Plattco Corporation
7 White Street
Plattsburgh, NY 12901
518 563-4640
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